Moody's: Latvia transition a success

Moody's Investors Service said in its annual report on Latvia that its A2 government bond rating and stable outlook recognize Latvia's successful transition over the past decade.

The bond rating and Moody's assessment of a very low risk of a payments moratorium in the event of a government bond default serve as the basis for Latvia's foreign currency country ceiling for bonds of Aa1.

"The ratings are anchored by ongoing structural reforms within the context of E.U. integration," said Moody's vice president Kenneth Orchard, author of the report.

"They also take into account Latvia's susceptibility to external shocks."

In September, Moody's said it changed the outlook on Latvia's government bond rating to stable from positive, adding that worsening economic imbalances driven by extraordinary, credit-fuelled growth have eroded the upside potential for the rating for the foreseeable future.

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